Grant Will Expand Harris’ Municipal Finance Heft
State and local governments across the country are facing growing financial challenges as they seek to balance their budgets and provide essential public services to their communities. But training programs that focus squarely on municipal finance are few, and no single entity maintains comprehensive data on governments’ financial performance—meaning that government officials often do not have the information or expertise needed to fix their budget problems.
Enter the Center for Municipal Finance at the University of Chicago Harris School of Public Policy, which applies the school’s well-known rigorous, evidenced-based approach to government funding and spending. The center also trains policymakers in an effort to help develop sustainable budgeting practices. Launched in 2013, the center will soon expand its research and teaching initiatives thanks to a two-year, $1.75 million grant from the Laura and John Arnold Foundation (LJAF). The funding will allow the center’s directors to hire full-time staff and to begin work on a municipal finance database that is intended to help researchers identify evidence-based solutions to fiscal issues.
“At the top of most local news programs these days are the issues of pensions and finance,” says Christopher Berry, associate professor and the center’s academic director. “But municipal finance is not on the radar screen of business schools, and finance in general is not on the radar screen of most policy schools. It’s fallen between the cracks. This is a rare opportunity to start a center in an area that’s been overlooked by academia but is of huge importance to the world.”
To help achieve its ambitious research, data, education and outreach agendas, the center has appointed Michael Belsky as the inaugural executive director, effective August 1. Belsky, a lecturer at Harris, has worked in the municipal finance industry for over 30 years, including a long career at Fitch Ratings and serving two terms as mayor of Highland Park, Illinois. He is currently the managing director of fixed income for Greenwich Management.
“When people think about Harris, they will, in part, think about expertise in municipal finance,” says Belsky. “While we think all areas of public policy are important, what underlies most policy initiatives is funding. And if you can’t adequately finance government, you can’t address housing issues, environmental issues, public safety.”
The center’s initiatives include a semi-annual CFO Forum that brings together chief financial officers of the nation’s 30 largest cities with academics and other practitioners to discuss topics like pensions, infrastructure finance, labor contracts and economic development tools, and a four-course certificate program in municipal finance for Harris students. The certificate program arose from a conversation between Berry and Belsky, who has had a long career in the municipal finance sector.
“We were lamenting that while existing public policy and public administration programs touch on municipal finance, no one has done it in a deep and comprehensive way,” Berry says. “So, we created one that did. And Harris graduates who have taken part in our municipal finance certificate program have done very well,” Berry adds. “They’re getting really good jobs in the industry, in budget and finance offices of state and local government, consulting and the municipal bond industry.”
The grant from LJAF will enable the Center for Municipal Finance to enrich its efforts in a number of ways, all stemming from the fact that it will have a full-time executive director, research assistants, a fellows program and executives-in-residence.
“That will be transformative for us, to have somebody who’s devoted full-time to the center. That’s the biggest thing the grant will do,” Berry says of Belsky’s appointment as executive director. “The greatest part of the grant is to codify what we’ve been trying to do on a shoestring.”
“In order to foster vibrant communities and strong local economies, we must improve the financial sustainability of our state and local governments,” said LJAF Vice President of Public Accountability Josh McGee. “The Center for Municipal Finance will work with policymakers to develop a deeper understanding of their fiscal issues and will help to identify promising solutions.”
Research and Data
Among the benefits of the grant will be the center’s ability to significantly ramp up research efforts. “We’ve been a relatively lean center up until this point,” Berry says. “What the center is really meant to do is have a research capacity, something we haven’t had up to this point. Equally important is a communication function, to bring that research out to practitioners.”
Part of that research surge will be the design of a comprehensive database of municipal finance that enables comparisons between cities—the Arnold Foundation grant will fund the design but not the construction—which will probably take a few years to get underway, Berry says.
“Surprisingly enough, that doesn’t exist right now,” he says. “It’s tricky because different cities perform different functions. That’s where a lot of the work will come in. You can’t easily compare the budget of Chicago with the budget of New York and say that New York spends more or less per capita, because the City of New York might do 10 other things that the City of Chicago doesn’t do.”
Education and Outreach
The CFO Forum program will continue and expand its reach through an advisory board of practitioners who will help ensure that topics have maximum relevance. Some future forums also will build on recent efforts to hold events of joint interest to CFOs and chief technology officers, given the frequent overlap of their efforts.
On the education side, the center will branch out from the current certificate program for students to launch an executive education program for mid-level municipal finance professionals, who can receive a certificate in a concentrated three- to five-day period, Belsky says.
Current students who participate in Harris’ Policy Labs initiative, through which they team up to undertake consulting projects for municipal and other governments, will have new opportunities to take on finance-oriented work, Belsky says.
And the grant will create the Municipal Finance Fellows program, through which two mid-career researchers per year will set up residence at Harris and explore deeper municipal finance questions with the support of the center’s research assistants.